TV Ad Spending Still Tops, But Web Growing Fast: Study

Here’s a real shocker that I know you’ll find hard to believe: television is the most popular medium in the United States.

That’s why brand advertisers continue to pour more marketing dollars into TV ad campaigns than print, radio or the internet. According to eMarketer, TV ad spending grew a robust 9.7 percent in 2010 as the economy started to rebound from the recession.

In absolute terms, TV ad spending remains king, with $60.5 billion projected for 2011. That’s far more than the $28.5 billion expected for internet ad spending, followed by $21.4 billion for newspapers, $15.7 billion for radio, and $13.9 billion for magazines.

“TV advertising is on course to return to prerecession levels,” said eMarketer CEO and co-founder Geoff Ramsey. “While the growth of online advertising has been robust, it hasn’t stopped brand advertisers from keeping the bulk of their budgets flowing through TV sets.”

It’s really not surprising that marketers are sticking with the Boob Tube. In this era of media fragmentation, television remains the closest thing we have to a national “hearth.” Even if the days of 30 million people tuning in to Walter Cronkite nightly are long gone, the most popular television programs like American Idol or The Super Bowl remain gathering places for citizens to come together in a form of “mass ceremony,” not unlike the now-quaint ritual of simultaneous newspaper consumption that Benedict Anderson so memorably described in Imagined Communities.

The simple fact is that ad dollars are flowing away from print newspapers and magazines. As the economy recovers, those dollars need a place to go. Advertisers know they can still reach millions of people, particularly young people in their target demographic, who flock to such programming as Jersey Shore, Glee and Gossip Girl.

However, things are not all hunky-dory in TV Land. One trend in particular should be disquieting to TV advertisers: the rise of so-called “time-shifted” TV playback, which refers to DVR and TiVo playback, as well as playback from a DVD recorder.

Time spent watching time-shifted TV grew 13.4 percent last year, according to Nielsen, compared to traditional television, where time spent increased only 0.2 percent. Naturally, any service that allows viewers to fast-forward through ads tends to undermine television marketing. But the industry is trying to fight back with services like the handy “Start Over” feature, which allows viewers to, well, start a program over, but does not permit fast-forwarding. (Of course, viewers who wish to avoid advertising altogether can simply watch C-Span or PBS, which are free of ads, except for the latter’s periodic pledge drives.)

The real issue for TV marketers is that while television remains the dominant medium for now and the foreseeable future, its supremacy won’t last, at least not in its current form.

In 2010, TV ad spending accounted for 38.6 percent of all media ad spending, compared to 16.9 percent for internet ad spending, according to eMarketer. By 2015, TV will still be on top, with 39.2 percent, the firm projects, while internet spending will have jumped all the way up to 25.6 percent. If those growth rates continue, it’s only a matter of time before internet ad spending overtakes TV spending.

The big picture is that the distinction between TV and the internet is eroding, especially as companies like Apple, Google and Netflix race to transform the living room into a media hub that integrates live and on-demand programming with web-based programming. Viewers are flocking to web-based video platforms like Hulu and YouTube, and as televisions become connected to the web, advertisers will increasingly deploy marketing campaigns across platforms.

For example, if I watch a Hulu show on the television in my living room, should that be counted as TV ad spending or internet ad spending? One wonders whether research firms like eMarketer won’t eventually abandon the distinction between TV and internet ad spending altogether, in favor of some kind of comprehensive video spending metric.

TV may still be king when it comes to ad spending, but as we roll into the second decade of the 21st century, one can be confident that its supremacy will not last forever. It’s just a matter of time.